Columns on Ethics, Leadership and Life by Gael O’Brien

Category Archives: Social Responsibility

Circumstances have caused an increasing number of companies and CEOs to speak out in recent years on hot-button social issues that previously weren’t part of traditional corporate citizenship. For example, nearly 400 companies filed an amicusbriefon marriage equity with the Supreme Court, and employers and organizations banded together using economic leverage to fight legislation discriminating on the basis of sexual-orientation in Indiana, North Carolina and Georgia. CEOs also weighed in against policies that exacerbated racial tension, like flying the Confederate flag and excessive use of force by local police.

This experience will serve corporate leaders well in navigating the challenges ahead. Issues of gender, race, sexual-orientation, pay equity, gun control and climate change are among the many hot-button social issues not going away – and likely to become more divisive — under theadministration of U.S. President Donald J. Trump. Corporate citizenship may be entering its greatest test.

Will a Trump presidency have the effect of muting CEO voices for fear of reprisals and Twitter attacks in a government now controlled by one political party? Or will corporate citizenship, acting out of a bigger sense of purpose, gain increased public trust and support?

The new landscape offers unknowns, perils and opportunity even as the administration’s agenda isn’t finalized. As president, Trump wields enormous power and a low tolerance for criticism which makes dissent tactically sensitive. Companies have a full plate keeping up with economic policies impacting their business. However, the hot-button social and environmental issues will create defining moments for leadership and corporate citizenship.

Three of my observations from recent corporate citizenship challenges: 1) how a company defines its purpose fosters momentum; 2) using economic leverage isn’t corporate bullying; and 3) it’s critical to speak up collectively for what’s right.

How a company defines its purpose fosters momentum

When company leaders see the purpose of business as delivering value to society and the environment in tandem with delivering financial results, things change. They create stakeholders, shifting into a more authentic and aware relationship with employees, customers and all those impacted by the business. It makes “community” personal and shapes values and behaviors around what enables the community to flourish or be harmed. If everyone has a stake in its success as stakeholders then what everyone does matters more. If a law or action discriminates against anyone in the community, for example, it is a catalyst in seeking out like-minded leaders to join in addressing the problem.

Using economic leverage isn’t corporate bullying

Under pressure from many business leaders, Indiana, former Governor Michael Pence, now Vice President Pence, backed down on provisions in the Religious Freedom Restoration Act that invited sexual-orientation discrimination. If the provisions weren’t dropped, Salesforce.com CEO Marc Benioff was the first to threaten economic sanctions (like reducing investment in the state and offering employees a relocation option). Economic leverage, used in other states to address discriminatory legislation was called “corporate bullying” by critics. As discrimination is illegal, how is it bullying for companies not to want their employees put at risk?

It’s critical to speak up collectively for what’s right

Corporate Citizenship is an individual and collective act. It involves working continuously to reinforce ethical behavior in one’s own company and working collectively with other CEOs and like-minded organizations to address social and environmental concerns important to you and your stakeholders. There is strength in numbers, especially in uncertain and volatile times. Commenting on corporate social activism, Bank of America’s Chairman and CEO Brian Moynihan said, “Our jobs as CEOs now include driving what we think is right. It’s not exactly political activism, but it is action on issues beyond business.”

It is unclear how, if at all, dissenting popular opinion will impact the Trump presidency and social and environmental issues. He lost the election’s popular vote by an unprecedented 2.9 million ballots. The day after the Inauguration over 600 peaceful marches – 400 in the U.S. cities and more than 200 around the world – put the president on notice regarding grassroots support for human rights issues. The president’s popularity (and how it impacts members of Congress) will be a bellwether of his ability to get his agenda through. Likewise, a company’s continued strong financial performance creates latitude to address controversial social issues.

Those companies whose business purpose is more than just profit are likely to avoid ethical problems longer if federal regulations and enforcement are relaxed. According to the 2017 Edelman Trust Barometer, 75 percent of respondents agree that “a company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates.” While 53 percent believe the current overall system has failed them, many continue to have faith in business as an institution. “Among those who are uncertain about whether the system is working for them,” the survey found, “it is business (58 percent) that they trust the most.”

Whether or not progress can be made on hot-button social issues in a Trump administration, acting out of a bigger sense of purpose and drawing strength from collective voices will likely gain increased public trust and support of corporate citizenship.

Photo via Whitehouse.gov.

Gael O’Brien, a Business Ethics Magazine columnist, is an executive coach and presenter focused on building leadership, trust, and reputation. She publishesTheWeek in Ethics.

Reprinted with permission: This column was originally published January 23, 2017 entitled “Corporate Citizenship in an Age of Uncertainty” in Business Ethics Magazine.

Leaders who unite their teams around a purpose beyond creating profit redefine what is possible. They show a road map for how collectively each person can have a positive impact on customers, an industry, community, and society. The lens these leaders hold up allows individuals to see how they can make a difference, a key element in employee engagement.

We don’t hear a lot about companies that are focused on a bigger purpose because they are far less likely to derail and become headlines in scandals or crises. They are grounded by company values which creates a common language and sense of “we,” which is a ballast in the constant change of our unpredictable world. Unilever and its Sustainable Living Plan is an illustration of purpose in action that is part of a business strategy. It sets out a plan that expects the company to double in size while also decreasing its environmental footprint and increasing the company’s positive social impact.

“Business can no longer afford to be a bystander,” according to Unilever’s CEO Paul Polman, “content to sit on the sidelines doing the minimum necessary to acquire its ‘license to operate.'” Polman is also one of the founding leaders of the B Team, a global initiative calling for a new kind of leadership — more inclusive and driven by a moral compass. The B Team seeks to redefine obligations to stakeholders — replacing maximizing profit with a focus on people, planet and profit.

The “business as usual” short-term profit lens has spewed out all kinds of red flags morphing into the recent financial meltdown among other problems. Last fall, a Washington Post column “How the cult of shareholder value wrecked American business” addressed the “self-reinforcing cycle in which corporate horizons have become shorter and shorter” with reduced CEO tenures and patience for the long-term, as well as the decreased average time stocks are held (now less than six months).

The irony, columnist Steven Pearlstein wrote, is that the focus on maximizing shareholder value hasn’t actually done that much for shareholders. “My guess,” he said, “is that it will be a new generation of employees that finally frees the American corporation from the ­shareholder-value straightjacket. Young people — particularly those with skills that are in high demand — today are drawn to work that not only pays well but also has meaning and social value.”

The push for purpose has many advocates in addition to Gen Y employees. The impact social entrepreneurs are having on creating positive social change as well as global giants like Unilever demonstrate that innovation, financial gain and societal benefit can fuel each other. Research also supports that purpose is as great a motivator as profit as Daniel Pink pointed out in Drive.

Purpose matters.

Inspired leaders know, says Simon Sinek, that “people don’t buy what you do, they buy why you do it.”

Gael O’Brien is The Ethics Coach columnist for Entrepreneur Magazine. She is also a columnist for Business Ethics Magazine; her December 2013 column is “Why Do Good People Do Bad Things? The Role of Spiritual Intelligence.”

Update: May 4, 2013: Pepsi pulled the ad, but a segment of the ad is still available to view as of today here

Having a woman CEO hasn’t sensitized those at Pepsi making advertising decisions based on an ad pulled this week showing a hysterical blond, battered, white woman intimidated by a policeman who is drinking a Mountain Dew demanding that she pick her batterer out of a line up of African-American men and a goat.

Does Pepsi’s pulse on America really think the new edgy is taking half-a-dozen demeaning stereotypes, throwing them at the wall and not caring what sticks as long as you notice the can of soda?

The ad blunder for Mountain Dew is a reminder to companies that the definition of corporate social responsibility goes beyond the dollars they give to improve causes important to them. If they don’t link their influence in the world to how they sell products, their corporate responsibility becomes just veneer.

When every nine seconds in the U.S. a woman is beaten or assaulted (the leading cause of injury to women), when a Georgia High School just had its first-ever integrated prom, when a Chicago Police Department is criticized for racial stereotyping and ”accidental racist” is too common……when rape in India — a four-year-old girl sexually assaulted died this week — continues to underscore attitudes toward women and girls — pandering to demeaning stereotypes in attempts at hip and wannabe amusing advertising betrays corporate responsibility.

One of the most powerful lessons from 2012 is how leaders use their influence.

Consider some examples of career sky dives from three men highly regarded in their field who failed to use their influence in ways to keep trust with their constituencies: former CIA Director David Petraeus (an affair with his biographer); former Penn State University President Graham Spanier (criminal charges filed); and Lance Armstrong (stripped of all seven Tour de France medals).

Demonstrating effective personal influence tackling social or political issues is a hard road for CEOs, presumably easier for politicians. In the examples of the leaders of the City of New York, Chick-Fil-A, and Patagonia there were mixed results.

At the University of Virgina (UVA), influence was exerted over organizational change in a manner that drew widespread criticism.

While not all politicians are willing to risk using political capital to further social issues, New York City Mayor Michael Bloomberg risked unpopularity in escalating his war on obesity by banning the sale of large sugary drinks. The ban approved in September by New York City’s Health Board takes effect in March 2013. New York is the first U. S. city to take such action.

“It’s not perfect, Bloomberg said, “it’s not the only answer, it’s not the only cause of people being overweight – but we’ve got to do something. We have an obligation to warn you when things are not good for your health.”

Chick-Fil-A CEO Dan Cathy found himself in a firestorm of controversy last summer when the national restaurant chain used company dollars to support anti-gay marriage groups; this pleased some patrons, disenfranchised others and resulted in widespread protests that continued with different players once the company indicated it would no longer support political or social issues.

Patagonia’s founder and chairman Yvon Chouinard has become a leading corporate voice in environmental responsibility by taking small, consistent steps to address how his company does business. He has served as a volunteer adviser to Wal-Mart in green business practices. Patagonia’s mission statement seeks to bring people together: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”

An accrediting body accused UVA’s Board of Visitors of using its influence to compromise the institution’s integrity, and failing to follow appropriate governance procedures in the ouster of President Teresa Sullivan. Sullivan was reinstated after faculty and student protests.

Rector Helen Dragas (Board of Visitors’ chair) had a vision for the university that didn’t include Sullivan leading it; Sullivan had been hired two years before. Citing challenges facing higher education, Dragas led an effort to force her out that met with strong, but civil, resistance from university constituencies who supported both Sullivan and a university culture that didn’t handle disagreements in the manner used by the Board of Visitors.

Governor Bob McDonnell reappointed Dragas to another term; however she has been meeting with Virginia legislative leaders lobbying to keep her position; the Legislature, which vets gubernatorial appointments, will vote in January on her reappointment.

Authority has limits. Influence fueled by earned trust has an infinite spectrum in which to operate.

Gael O’Brien is also a columnist for Business Ethics Magazine; her December 2012 column is “Women in the C-Suite: Finding Ways to Break the Seal.” She is The Ethics Coach columnist for Entrepreneur Magazine.

Twenty first-graders, six and seven years of age, were murdered December 14, 2012 along with their school principal, school psychologist and four teachers at Sandy Hook Elementary School in Newtown, Connecticut. The 20-year old gunman also killed his mother.

In Orange County, CA on December 15, 2012, a man was arrested after firing 50 rounds into the air and ground in the parking lot of a busy mall; no injuries, shoppers frightened and stores went into lock down.

What do we do to turn around a culture of violence that in 2012 has killed so many children, families, parents and innocent bystanders? Whether those pulling the trigger are mentally ill, driven by hate, or so isolated that they’ve fallen off radar, human life in their hands is reduced to a video game.

The right to bear arms for lawful purposes in a culture of violence is so much more complicated than the Founding Fathers envisioned. The U.S. has the highest per capita gun ownership in the world; “America’s gun-related murder rate is the highest in the developed world, excluding Mexico….”

Gun control must be back on the public agenda to discuss and address without politics, along with other issues like mental health that are impacting violence. After the murders in Wisconsin in August 2012, President Obama said “he would look at additional ways to reduce violence.” The murders in Connecticut two days ago underscore the work ahead of us.

We need a national discussion about ways to reduce violence. It is an opportunity for communities to come together, engaging the collaboration of leaders from local businesses, universities, schools, and all segments of the community to address initiatives and partnerships that can result in further steps to reduce violence. For example, a program in Chicago has demonstrated that mentoring reduces youth violence.

Examples go on and on. The point is we need national and local leadership around national and local conversations about how to reduce violence in America. We need to identify, consider, integrate or build off what has been done that can make a difference if applied in particular settings.

It isn’t about acting out of fear or expecting to live in an armored glass bubble of false security. It is about the act of coming together as a nation to address ways of shifting and changing a culture of violence.

It is about dialogue, best thinking, collaboration and partnership — meeting unflinchingly and head on the challenges ahead and knowing that working collaboratively we can take the appropriate steps to find solutions.